Friday Five: The Emergence of Social Business

Over the past few days, the issue of social business has cropped up in the media, on Twitter discussions and around the blogosphere. Social Business is a recent but very transformational trend revolutionizing the way companies function and generate value for all the constituents (stakeholders, employees, customers, partners, suppliers). This concept deserves more attention than businesses give it. Social business has emerged and evolved into function-specific capabilities such as marketing, advocacy and Enterprise 2.0. So why aren’t more companies moving towards more social capabilities?

PRSA’s “Friday Five” post — an analysis of the week’s biggest PR and business news and commentary — explores how social business has been translated across various industries, the complexities behind social business adoption and the importance of the change agent/management role. We will also look at how one company’s social business practice has taken their consumer engagement to the next level.

This week, JP Rangaswami, Salesforce, chief scientist, discussed Haydn Shaunessy’s argument in his recent book “The Elastic Enterprise,” co-authored with Nicholas Vitalari. Haydn uses the examples of Apple and Amazon to explain how a truly social enterprise changes industrial landscapes irreversibly, how the ecosystems evolve, how participants create and share value. Rangaswami, while in agreement in Haydn, argues that Apple and Amazon’s radical transformations result in at least one effect that Shaunessy doesn’t mention: the slimming down, exit, sometimes even extinction, of many of the incumbents in related industries. In a true social enterprise, the informed, connected, empowered customer is now engaging with the informed, connected employee: it is no surprise that the value created is truly shared.

American Express (AMEX) has gone social, and consumers are reaping the benefits. By motivating people through discounts and coupons, AMEX – in partnership with key vendors- has enabled a win-win situation that’s creating a viral buzz for the vendor, enables AMEX to gather key data about consumer spending habits and whereabouts, while requiring them to increase their use of their card in places where people are less likely to charge. Check-ins on Foursquare and linkages on Twitter deliver AMEX to their consumers’ digital doorstep, enforcing the idea of this deeper consumer engagement that extends beyond a credit card.

Adopting new technology practices and social media channels is not an overnight process. Edelman Digital walks us through the complexities of becoming a social business and discusses how critical change management is to social business transformation. Change management requires business leaders to actually “change” their behavior first, not just give lip service to the organization. It’s extremely complex and the truth is that businesses are not as fast to adopt these practices as we expect them to be. The point is that there isn’t just “one” process or “5 steps” of magic sauce that will solve the problems that every organization faces when socializing their internal and external practices for the purpose of modernizing companies in the digital age.

Social business is being translated across various industries including advertising and B2B marketing. GE, IBM and American Express stand out when it comes to branding themselves in modern, innovative ways. They embrace the web to extend and define their brands while connecting with their diverse audiences, taking the customer conversation beyond the product. Smaller B2B companies don’t believe that the strategies and tactics used to grow consumer brands (such as research that leads to customer insight, emotional appeals and awareness campaigns) are effective with business decision makers. The challenge is getting smaller B2Bs to see that there is opportunity for companies that choose to seize this gap and differentiate themselves to be in position for long-term success. Behave like a small GE, IBM or American Express and maybe one day you’ll perform like one.

After weeks of discussing strategy and intention behind consumer engagement, Brian Solis redirects his attention to enterprise social networks (ESNs) and the importance of change agents, as they lead their companies into this new era of social business. ESNs are on the rise as they can deliver an immediate solution for aligning stakeholders around activity streams with the familiarity of Twitter or Facebook. Solis argues that companies will thrive not because of a move toward a “social” business or enterprise, but because leadership sees the possibilities. In his blog post this week, Solis outlines four key ways enterprise social networking delivers value to a social business. They encourage sharing, capture knowledge, enable action and empower employees.

The majority of organizations may not be as far along in ESN deployment as the company might position itself. Regardless of where a company falls on the maturity curve, your ESN action plan should be composed of four basic elements: objectives, metrics, relationships and technology. In the end, it comes down to the change agent to demonstrate the opportunities in ESNs and social networking. The truth is that employee engagement influences customer engagement, and ultimately that’s what companies are seeking.

Nicole Castro is the public relations associate at the Public Relations Society of America.